NALA Certified Paralegal Practice Exam

A contract is fundamentally defined as a legally enforceable agreement between two or more parties. This definition emphasizes several key components: the mutual agreement or consent of the parties involved, the intention to create legal obligations, and the capacity to enter into a binding arrangement. For a contract to be valid, it typically must involve an offer, acceptance, consideration (something of value exchanged), and legal purpose.

The other options highlight scenarios that do not meet the criteria for a contract. A verbal agreement with a witness may lack the necessary elements, such as consideration or legal capacity, to be enforceable. An informal arrangement between friends usually lacks the seriousness required for a legal contract, and while it might reflect a consensus, it often does not display intention to create binding obligations. A type of lease for property rentals falls under a specific form of contract, but it does not define what a contract is as a whole; rather, it illustrates one kind of contract among many. Therefore, defining a contract simply as a legally enforceable agreement captures the essence of what makes such agreements valid and actionable under the law.